GEO集團 (GEO) 2026年第三季法說會：營收創新高，上調財測指引

GEO 集團 (NYSE: GEO) 公布 2026 財年第三季創紀錄的單季營收與調整後 EBITDA，主要受惠於美國移民暨海關執法局 (ICE) 的新合約、設施使用率提升以及運輸服務業務的成長。管理層上調 2026 全年獲利展望，並預期第四季將再創單季新高紀錄。

核心摘要

• 2026 年第三季營收年增 12% 至 7.611 億美元，調整後 EBITDA 成長 21% 至 1.453 億美元，雙雙創下 GEO 的單季歷史新高。
• 調整後淨利成長 48% 至 5,180 萬美元，稀釋每股盈餘為 0.39 美元。歸屬於 GEO 營運的 GAAP 淨利為 4,920 萬美元，稀釋每股盈餘為 0.37 美元。
• GEO 將 2026 全年營收預估定為 29.75 億至 30.25 億美元，並將調整後 EBITDA 財測上調至 5.68 億至 5.73 億美元，調整後淨利財測上調至 1.85 億至 1.9 億美元。
• 管理層表示，2026 年期間簽署的新合約與擴增合約預計將帶來約 5 億美元的年度新增營收。四座新增的 ICE 設施（合計約 4,800 個床位）預計將於 2027 年投入營運。
• GEO 完成以 9.5 億美元將阿德蘭托綜合設施 (Adelanto Complex) 出售給美國國土安全部的交易。約 7.05 億美元的淨收益用於贖回 6.5 億美元的優先擔保票據。
• 董事會將 GEO 截至 2029 年 12 月 31 日的股票回購授權額度增加 7.5 億美元至 12.5 億美元。管理層表示，在進一步降低負債的同時，股票回購仍是首要考量之一。

關鍵財務業績

營業費用增加約 8.5%，反映出 ICE 設施的啟用及入住率提高。一般及管理費用佔營收比重從 9.1% 上升至約 9.5%，主要是因為額外的業務拓展成本。

業務與營運表現

自有及租賃安全服務營收年增約 4,600 萬美元或 13%。此項成長主要是由依據新 ICE 合約啟用的三座公司自有設施所推動，但部分被出售奧克拉荷馬州勞頓 (Lawton) 設施後的營收損失所抵銷。

純管理合約營收增加約 3,100 萬美元或 19%，主要歸因於負責管理北佛羅里達拘留中心 (North Florida Detention Facility) 的合資公司以及運輸營收的成長。

GEO 營運中的 ICE 設施目前收容人數約為 24,000 人，約佔管理層所引述全美約 73,000 名 ICE 總收容人數的三分之一。在完成既定啟用計畫後，GEO 預計將在 29 座設施中擁有約 33,000 個合約 ICE 床位。

該公司概述了預定於 2027 年啟動的三項主要 ICE 專案：

• 擁有 1,188 個床位的大角 (Bighorn) 設施預計將於 2027 年第一季開始營運，第一年將產生約 8,500 萬美元的年度營收。
• 擁有 1,320 個床位的里弗斯 (Rivers) 設施預計同樣於 2027 年第一季開始營運，第一年將產生約 8,000 萬美元的年度營收。
• 擁有 2,329 個床位的大泉綜合設施 (Big Spring Complex) 預計將於 2027 年第二季開始營運，第一年將產生約 2 億美元的年度營收。

ICE 將補償重啟這些設施所需的資本支出，並提供啟動費用資金。在 2027 年營運常態化後，這三項專案預計合計還將產生約 2,800 萬美元的年度運輸服務營收。

GEO 在四座公司自有設施中擁有約 2,900 個閒置床位。管理層估計，全面投入使用可合計帶來約 1.7 億美元的新增營收。截至本季末，現有營運中設施的入住率為 93%，在尚未計入新設施的情況下，理論上仍有 7% 的使用率提升空間。

電子監控與督導業務營收年增約 1.6%，扭轉了連續數年的下滑趨勢。強化監督出庭計畫（簡稱 ISAP）的總參與人數達到約 190,000 人，高於三個月前的 184,000 人。佩戴 GPS 電子腳鐐的參與者從 2025 年初的 17,000 人增加至約 58,000 人，另有約 121,000 名參與者接受個案管理服務。失聯追蹤合約在第三季創造了約 300 萬美元的營收。

管理層財務指引

該公司表示，GAAP 淨利財測包含了出售阿德蘭托綜合設施的處分利益。若以預估中位數計算，全年調整後淨利將較 2025 年成長 56%，調整後 EBITDA 則將成長 23%。

GEO 預計 2026 全年未獲補償的資本支出為 1.4 億至 1.5 億美元。管理層預期 2027 年常態性未獲補償的資本支出將降至約 1 億美元。

管理層指出了 2027 年的數個潛在成長動能，包括四座新 ICE 設施的啟用、營運中設施使用率的提高、閒置產能重啟的可能性、佛羅里達州格雷斯維爾 (Graceville) 與灣區 (Bay) 設施合約預計於 2027 年 7 月 1 日進行的過渡轉換、ISAP 業務組合的進一步改善、運輸業務成長，以及失聯追蹤服務使用量的增加。

資產負債表與資本配置

在出售阿德蘭托設施並贖回債務後，GEO 未償還的公司債務包含 2031 年到期的 6.25 億美元優先無擔保票據。可用流動性約為 6 億美元（包含現金與循環信貸可用額度），淨槓桿率約為調整後 EBITDA 的 1 倍。

管理層打算將淨槓桿率維持在該水準或以下。GEO 表示，只要維持在特定槓桿門檻以下，便可進行無限制的受限支付（包括股票回購）。該公司亦在評估加速股票回購機制。

風險與觀察重點

• GEO 正就可能向 ICE 出售最多四座額外設施進行談判，但尚未達成具體協議。管理層提醒，政府的時程安排難以預估，這些交易也可能不會成行。
• GEO 要求在潛在不動產出售中附帶持續性的長期支援服務合約。管理層表示，這項要求增加了複雜度，並可能拉長談判時間。
• ISAP 的參與人數僅呈現溫和增加，但轉向高單價的電子腳鐐與個案管理服務改善了營收結構。
• 阿德蘭托管理協議中與所有權相關的定價仍在協商中。管理層預計，擴編人員配置與服務將可抵銷所有權相關資金的任何減少。

分析師問答重點

在產能方面，管理層表示現有物業組合 93% 的入住率意味著仍有 7% 的使用率提升空間。GEO 亦預計兩座新設施的約 2,500 個床位將於 1 月 1 日前啟用，隨後另外兩座設施的約 2,300 個床位將於 3 月 1 日前啟用。

在 ISAP 方面，管理層表示該計畫在兩年前未如預期發展，是因為政府優先考慮拘留收容能力。儘管如此，GEO 仍預期隨著拘留收容能力建立，該計畫將會擴大規模，特別是透過轉向電子腳鐐以及更密集的個案管理。

在潛在資產出售收益方面，管理層表示，大額收益將同時考慮用於償還債務與回饋股東。若達成進一步交易，GEO 將評估加速股票回購機制。

管理層還證實，阿德蘭托擴編人員所帶來的約 6,000 萬美元年度營收成長已納入 2026 年財測中。第四季資本支出預期的增加，主要與 ICE 設施啟用有關，以及部分自今年稍早延後執行的專案。

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管理層陳述

Operator

[Operator Instructions] Please note, this event is being recorded. I would now like to turn the conference over to Pablo Páez, Executive Vice President of Corporate Relations. Please go ahead.

Pablo Paez

Thank you, operator. Good afternoon, everyone, and thank you for joining us for today's discussion of The GEO Group's third quarter 2026 earnings results. With us today are George Zoley, Chairman, Chief Executive Officer, and Founder, and Brian Evans, Senior Vice President and Chief Financial Officer.

This afternoon, we will discuss our third quarter results as well as our outlook. We will conclude the call with a question-and-answer session. This conference call is also being webcast live on our investor website at investors.geogroup.com. Today, we will discuss non-GAAP basis information. A reconciliation from non-GAAP basis information to GAAP basis results is included in the press release and the supplemental disclosure we issued this morning.

Additionally, much of the information we will discuss today, including the answers we give in response to your questions, may include forward-looking statements regarding our beliefs and current expectations with respect to various matters. These forward-looking statements are intended to fall within the safe harbor provisions of the securities laws. Our actual results may differ materially from those in the forward-looking statements as a result of various factors contained in our Securities and Exchange Commission filings, including the Form 10-K, 10-Q, and 8-K reports. With that, please allow me to turn this call over to our Chairman, CEO, and Founder, George Zoley. George?

George Zoley

Thank you, Pablo, and good afternoon, everyone, and thank you for joining us. Our diversified business units have continued to deliver strong financial and operational performance through 2026, and our third quarter 2026 results marked a record-breaking quarter for GEO. Compared to the same period in 2025, our third quarter 2026 revenues increased 12% to approximately $761.1 million, while our third quarter 2026 net income attributable to GEO operations was approximately $49.2 million. Compared to the same period in 2025, our third quarter 2026 adjusted EBITDA increased 21% to approximately $145.3 million, and our adjusted net income increased 48% to approximately $51.8 million. These results represent the highest level of quarterly revenues and adjusted EBITDA ever reported in our company's history. Even better-than-expected performance in 2026 has been driven by the significant revenue growth from the new contracts that we entered into throughout 2025. They included the activation of 4 facilities to house ICE detainees, totaling 6,000 beds, valued at approximately $280 million in annual revenues.

So far in 2026, we have had an even more successful year for the new expanded services, entering into new contracts for the activation of 4 additional facilities to house ICE detainees, totaling approximately 4,800 beds. These contracts, along with the expanded scope of services at existing facilities, created an overall value of approximately $500 million in incremental annual revenues. First, we entered into a 5-year support services contract with ICE for the activation of a federal immigration processing center at the 1,188-bed Bighorn facility in Hudson, Colorado, while also entering into a lease agreement with the facility owner. The Bighorn support services contract is expected to generate approximately $85 million in annual revenues in the first full year of operations, starting in the first quarter of 2027.

We then entered into a 5-year support services contract with ICE for the activation of a federal immigration processing center in the GEO-owned 1,320-bed Rivers facility in Winton, North Carolina. The Rivers support services contract is expected to generate approximately $80 million in annual revenues in the first full year of operations, also starting in the first quarter of 2027. More recently, we announced earlier this week the city of Big Spring in Texas has entered into a 10-year intergovernmental service agreement with ICE for the activation of a federal immigration processing center at the 2,329-bed Big Spring Complex comprised of a 1,404-bed Flightline facility and the 925-bed Cedar Hill facility.

GEO will provide support services at the Big Spring Complex, which is expected to generate approximately $200 million in annual revenues for GEO in the first full year of operations, starting in the second quarter of 2027. Under all 3 of these contracts, ICE will reimburse GEO for the capital expenditures needed to reactivate these 4 facilities, as well as providing funding for startup expenses during the activation period. Following the activation of these 4 facilities, our total ICE beds under contract will increase to approximately 33,000 beds at 29 facilities. The current census across our active ICE facilities is approximately 24,000, representing approximately one-third of the current national ICE population of approximately 73,000.

Over the past 2 quarters, we have also entered into new or modified contracts for the continued provision of support services at existing ICE processing centers. First, during the third quarter, we entered into a contract modification to increase staffing levels at the 1,940-bed Adelanto ICE Processing Center to support the increase in the scope of services at the facility, adding $60 million in incremental annual revenues. More recently, last week, we announced that we have entered into a new 10-year management contract with expanded support services at incremental annual revenue value of $50 million at the GEO-owned 1,635-bed Northwest ICE Processing Center in Tacoma, Washington.

The new 10-year contract is expected to generate approximately $140 million in total annual revenues for GEO and continue through October 27, 2036, making it the first contract we have entered into with ICE with a full base term of 10 years. This new contract was awarded under an ongoing procurement that involves 3 other GEO-owned facilities: the Aurora facility, the Moshannon Valley facility, and Broward ICE Processing Center, which are also expected to receive new 10-year contract awards.

ICE enforcement initiatives nationwide are supported by significant funding that has already been approved by the United States Congress. ICE was allocated $45 billion for detention under the One Big Beautiful Bill, which is available through September 30, 2029. We believe that less than $10 billion of the $45 billion has been spent so far. Under the Secure America Act, ICE also received $38.5 billion in baseline appropriations funding, as well as an additional $30 billion for other priorities under the One Big Beautiful Bill, all of which is also available through September 30. As ICE continues to pursue these enforcement initiatives, we expect GEO to continue to be part of the solution as a 40-year partner to the agency.

Following our recent contract announcements, we now have approximately 2,900 idle beds that remain available at 4 company-owned facilities, which are well-suited for the needs of the federal government. At full capacity, these 2,900 idle beds could generate approximately $170 million in combined incremental revenues. Additionally, we have expansion capacity of several thousands of beds at existing GEO-managed ICE facilities. Our third quarter 2026 results also reflect a significant expansion in our secure transportation services on behalf of ICE and the U.S. Marshals Service as a result of new or amended contracts we entered into in 2025. The support services that we provide under ICE air transportation subcontracts have continued to steadily grow, driven by the increase in the number of removal flights. Additionally, our new Bighorn, Rivers, and Big Spring contracts with ICE are expected to generate approximately $28 million in combined additional annual transportation services revenues once normalized in 2027.

Importantly, during the third quarter of 2026, our ISAP contract continued to experience a steady technology shift to more intensive and higher-priced monitoring devices, such as ankle monitors. ISAP is the only ICE program currently in place to provide electronic monitoring and case management services for individuals on the non-detained docket. The program relies on several forms of monitoring, including GPS ankle bracelets or wrist-worn devices that provide real-time tracking, as well as the SmartLink phone app, which relies on facial recognition, voice ID, and GPS to confirm a person's location during the predetermined check-in.

The current overall ISAP count is approximately 190,000 participants, up from 184,000 participants 3 months ago. The number of ISAP participants on GPS ankle monitors has increased to approximately 58,000 currently from 17,000 early in 2025. We also continue to experience a steady increase in the number of ISAP participants assigned to case management services, which involves staff interaction and monitoring for approximately 121,000 individuals currently. As a result of these trends, revenue and net operating income for our electronic monitoring and supervision services segment increased during the third quarter of 2026 compared to the same period a year ago, reversing a multi-year trend of revenue and net operating income declines. Additionally, during the third quarter of 2026, we generated revenues of approximately $3 million from our skip tracing contracts.

Moving to our outlook, we have increased our net income and adjusted EBITDA guidance for 2026 to reflect the strength of our results in the first 3 quarters of the year. Our fourth quarter 2026 revenue and adjusted EBITDA guidance exceeds our third quarter 2026 results, positioning GEO to set another record-breaking quarter. Looking forward to 2027, there are several sources of future upside compared to our 2026 guidance. They include the expected activation of 4 new ICE facilities at Bighorn, Rivers, and the Big Spring Complex; additional growth in our secure services segment from the reactivation of additional idle facilities and/or higher overall populations across our active facilities; the expected transition of our previously announced managed-only contracts for the 1,884-bed Graceville facility and the 985-bed Bay facility in the state of Florida, which are expected to occur on July 1, 2027; additional volume increases and/or accelerated technology service mix in our ISAP contract; additional growth in our secure transportation services business; and additional revenue from higher utilization of our skip tracing contracts.

Before I turn the call over to our CFO, Shayn March, for a more detailed review of our third quarter results and guidance, I'd like to provide you with an update regarding the plan by ICE and DHS to purchase existing privately-owned turnkey ICE processing centers. As we announced last month, we completed the sale of our 1,280-bed Adelanto West ICE Processing Center, 660-bed Adelanto East ICE Processing Center, and our 704-bed Desert View Annex to DHS for an aggregate gross sales price of $950 million, with net proceeds after taxes and transaction fees and expenses of approximately $705 million. We expect to continue providing support services at the Adelanto Complex under our existing contract with ICE, which has a full effective term through December 19, 2034.

We used proceeds from the sales for the redemption of our $650 million 2029 senior secured notes, and we also entered into an amended and restated credit agreement extending the maturity of our $550 million revolving credit facility to July 2031, while also increasing our restricted payment capacity, including share repurchases. Following the redemption of the 2029 senior secured notes, our total outstanding corporate debt consists of our 2031 senior unsecured notes totaling $625 million. As we previously announced, our board of directors has increased our share repurchase authorization, which is effective through December 31, 2029, by $750 million to $1.25 billion. Based on our current leverage and so long as we remain below specified leverage levels, GEO is permitted to make unlimited restricted payments, including share repurchases, under both the amended credit facility agreement and the senior unsecured note indenture.

Given the intrinsic value of our assets, including 48,000 owned beds, our strong financial performance in providing diversified secured support services, and our expected future growth, we believe that our stock continues to be significantly undervalued and offers a very attractive investment opportunity. Therefore, in addition to further debt reduction and other general corporate purposes, we intend to allocate a substantial portion of future facility sales proceeds and recurring free cash flow toward our expanded share repurchase authorization, which may include structured share repurchases on an accelerated basis.

Following the recently completed asset sales, ICE now uses approximately 34 existing detention sites nationwide that are owned and operated by private contractors. CoreCivic now owns and operates approximately 12 ICE detention facilities, while GEO owns and operates 20 ICE detention facilities. In addition to the facility sales we completed last month, we remain engaged in an active process for the sale of multiple other company-owned facilities to ICE, subject to mutual agreement on price and GEO's continued management of those facilities under long-term support services contracts. We believe we have 2 types of assets: the buildings and the businesses of providing support services. We are pursuing additional potential sales of the buildings, but we want to retain the business of providing support services.

We continue to consider ourselves primarily a support services operator and will place particular importance on our ability to continue our support services at any additional facility sold to ICE. Specifically, we believe that our current active negotiations could result in additional sales before the end of 2026 for up to 4 additional facilities. We believe that future sales are likely to have similar valuations to the transactions that have already been completed by ICE, with standard adjustments with respect to geography, facility size, and age. And it is possible that the number of facilities targeted for acquisition by ICE could continue to grow in the future.

At this time, there is no definitive agreement in place and no precise timeline for the closing of any additional transactions, and GEO can provide no assurance that any additional transactions will, in fact, occur. While the exact timing of government actions is always difficult to estimate, we remain focused on pursuing new growth opportunities and allocating capital to enhance long-term value for our shareholders. At this time, I will turn the call over to Shayn to review our quarterly results and increased guidance.

Shayn March

Thank you, George. Good afternoon, everyone. The third quarter of 2026 set all-time highs for GEO in quarterly revenues and adjusted EBITDA, and also an all-time high in quarterly adjusted net income under a non-REIT corporate structure. Revenues for the third quarter of 2026 increased to approximately $761.1 million, up from approximately $682.3 million for the prior year's third quarter, reflecting a 12% increase. For the third quarter of 2026, we reported net income attributable to GEO operations of approximately $49.2 million, or $0.37 per diluted share. This compares to net income attributable to GEO operations of approximately $173.9 million, or $1.24 per diluted share, in the third quarter of 2025, which included the $228 million gain on the sale of the Lawton, Oklahoma facility. Adjusting for unusual and non-recurring items, third quarter 2026 adjusted net income increased to approximately $51.8 million, or $0.39 per diluted share, from approximately $35 million, or $0.25 per diluted share, in the prior year's third quarter. Our adjusted EBITDA for the third quarter of 2026 increased to approximately $145.3 million, up from approximately $120.1 million in the prior year's third quarter, reflecting a 21% increase.

Driving this historical quarterly performance, our owned and leased secured services revenues increased by approximately $46 million, or 13%, compared to the prior year's third quarter. This increase was driven by the activation of 3 company-owned facilities under new contracts with ICE, which was partly offset by revenue lost from the sale of the Lawton, Oklahoma facility. Quarterly revenues for our managed-only contracts increased by approximately $31 million, or 19%, from the prior year's third quarter. This increase was primarily driven by the joint venture agreement for the management of the North Florida Detention Facility, as well as certain transportation revenue increases that are reported in this segment. Quarterly revenues for our owned and leased reentry services increased by approximately $3.5 million, partly offset by a $3 million decline in non-residential services revenues compared to the prior year's third quarter. Finally, third quarter 2026 revenues for our electronic monitoring and supervision services increased by approximately 1.6% compared to the third quarter of 2025, reversing a multi-year trend of quarterly revenue declines for this important segment and demonstrating the strength of the favorable technology and case management mix shift in our ISAP contract, which more than offset some price reductions previously reported.

Turning to expenses, during the third quarter of 2026, our operating expenses increased by approximately 8.5% as a result of the activation of our ICE facility contracts and increased occupancy compared to the prior year's third quarter. The general and administrative expenses for the third quarter of 2026 increased modestly to approximately 9.5% of revenue from approximately 9.1% of the prior year's third quarter revenue, the result of additional business development expenses. Our third quarter 2026 net interest expense remained steady at approximately $36 million compared to the prior year's third quarter. Our effective tax rate for the third quarter of 2026 was approximately 27%.

Moving to our outlook, we have updated our guidance for the fourth quarter and the full year of 2026. In the fourth quarter of 2026, we've increased our GAAP net income guidance to a range of $591 million to $595.5 million, which includes the gain on the sale of the Adelanto, California ICE complex. We've also increased fourth quarter 2026 adjusted net income guidance to a range of $46 million to $51 million, or a range of $0.35 to $0.39 per diluted share, on quarterly revenue of $777 million to $827 million. We have increased our fourth quarter 2026 adjusted EBITDA guidance to a range of $149 million to $154 million. If this guidance is achieved, the fourth quarter for 2026 would set another record-breaking quarter for GEO, while also positioning our company for a strong 2027 outlook.

For the full year 2026, we've increased GAAP net income guidance to a range of $726.3 million to $730.5 million, which includes the gain on sale of the Adelanto, California ICE complex in the fourth quarter of 2026. We have also increased full year 2026 adjusted net income guidance to a range of $185 million to $190 million, or a range of $1.40 to $1.44 per diluted share, on annual revenues of $2.975 billion to $3.025 billion, and based on an effective tax rate of approximately 28% inclusive of known discrete items. This represents a 56% increase over 2025 adjusted net income at the midpoint of $187.5 million. We have increased our full year 2026 adjusted EBITDA guidance to a range of $568 million to $573 million, representing a 23% increase at the midpoint of $570.5 million. We expect total unreimbursed capital expenditures for the full year 2026 to be between $140 million and $150 million, and expect normal unreimbursed CapEx to decline to approximately $100 million in 2027.

Moving to our balance sheet, following the sale of the Adelanto Complex in October, we completed the redemption of our $650 million senior secured notes and executed an amendment to our $550 million revolving credit facility, extending its maturity and increasing our restricted payments capacity, including share repurchases. Our total outstanding corporate debt consists of our 2031 senior unsecured notes totaling $625 million. Our available liquidity is approximately $600 million, including cash on hand and revolver availability. Net of cash, our current leverage is approximately 1x adjusted EBITDA. And based on our current outlook, we have reset our capital strategy to remain at or below this net leverage level going forward.

Based on our current leverage, and so long as we remain below specified leverage levels, GEO is permitted to make unlimited restricted payments, including share repurchases, under both the amended credit facility agreement and the senior unsecured note indenture. Given what I believe is a significant discount on our stock valuation, our board of directors, as previously reported, increased our share repurchase authorization, which is effective through December 31, 2029, by $750 million to $1.25 billion. We plan to remain active under this program regardless of future asset sales. At this time, I will turn the call back to George.

George Zoley

Thank you, Shayn. To recap, our third quarter of 2026 was a historic quarter for our company, setting new all-time highs for GEO for quarterly revenues and adjusted EBITDA. And based on our increased guidance, we expect the fourth quarter of 2026 to be another record-setting quarter. This historic financial performance in 2026 will position GEO for a very strong outlook in 2027, with several sources of potential further upside heading into next year, including: the expected activation of 4 new ICE facilities at Bighorn, Rivers, and the Big Spring Complex; additional growth in our secure services segment from the reactivation of additional idle facilities and overall higher populations across our active facilities; the expected transition of our previously announced managed-only contracts for the 1,884-bed Graceville facility and the 985-bed Bay facility in the state of Florida, which are expected to transition on July 1, 2027; additional volume increases and/or accelerated technology and service mix in our ISAP contract; additional growth in our secure transportation services business; and additional revenue from higher utilization of our skip tracing contracts.

In addition to our strong financial performance and significant expected future growth, we believe that additional asset sales could be completed before the end of 2026. Having already completed the sale of the Adelanto Complex for $950 million, we believe it's possible that up to 4 additional facilities owned by GEO could be sold in the fourth quarter of 2026. These potential asset sales represent another significant liquidity and shareholder value creation event for our company.

Given the intrinsic value of our assets, including 48,000 owned beds, our strong financial performance in providing diversified secure support services, and our expected future growth, we believe that our stock continues to be significantly undervalued and share repurchases are therefore a paramount capital allocation priority for our company. That completes our remarks and we would be glad to take any questions. Thank you.

Operator

[Operator Instructions] The first question today comes from Joe Gomes with Noble Capital. Please go ahead.

分析師問答

Joseph Gomes

Good afternoon.

George Zoley

Good afternoon.

Joseph Gomes

So I wanted to start out, George, looking at 93% occupancy at the end of the quarter, how much additional utilization upside remains in your view?

George Zoley

At existing facilities, mathematically, it would be 7%. But we are now transitioning 4 new facilities, as I discussed, 2 of which will open by January 1, representing about 2,500 beds, and 2 more facilities by March 1, representing about 2,300 beds. Those are major increases in our capacity.

Joseph Gomes

Okay, thanks for that. Maybe you could talk a little bit more about the ISAP contract. Obviously, it hasn't gone as the government had said, looking at numbers significantly higher than where we are today. I think there's about 1 year left on that contract. Obviously, you guys have won that contract on multiple occasions, but I just want to get your view and your thoughts on ISAP, and is ICE going to eventually start to use that contract, and your expectations when it comes up for renewal?

George Zoley

Okay. Well, remember the ISAP contract is under a program called Alternatives to Detention. The focus has obviously been under this administration to increase detention capacity, and we've participated in that initiative, increasing our contracted bed space at this point to 33,000 beds, which is almost the entirety of the number of beds that was under the Biden administration. So it's been very significant.

The ISAP contract didn't develop as we expected 2 years ago, but we're very pleased that the technology mix has shifted towards these more intensive electronic devices, including increasing case management. So we do think that contract will continue to grow and expand as the detention capacity is achieved by this administration in this country. So once that is achieved, we think ISAP will continue to grow as it has, particularly with regard to the technology mix.

Joseph Gomes

Yes, great. Thanks for that. I'll pass it on.

Operator

The next question comes from Greg Gibas with Northland Securities. Please go ahead.

Gregory Gibas

Good afternoon, George and Shayn. Wondering how you're thinking about ICE's timeframe for additional facility sales if they were to occur, and maybe if you could discuss kind of how you expect to split incremental proceeds for debt paydown versus repurchases, and would you consider an ASR like we've seen from your public peer?

George Zoley

Well, I'll take the first part of that question. We do think there is a reasonable chance of multiple sales occurring before the end of this year involving our company. And it is a complicated process because the facilities are located in different states, different designs, different cost of replacement construction for each facility, and we've required that the facility's contracts continue for a significant period of time, which further complicates and lengthens the process. But we are reasonably optimistic, as I say, that 1 or multiple facilities could be purchased by ICE from our company before the end of this quarter. With regard to the use of proceeds, I'll defer to Shayn March.

Shayn March

Regarding proceed application, we really don't have that much debt left. So it's the $625 million of unsecured notes, so any significant asset sale we would definitely use to reduce our indebtedness, and we would absolutely consider any type of return of capital back to shareholders, including accelerated type structure transactions. So we're evaluating all the different options and we'll act accordingly once those sales were to occur.

Gregory Gibas

Got it. That's very helpful. And to follow up on the previous question as it relates to ISAP, and I know ICE is very detention-focused, but wondering if you could touch on how populations have trended with respect to the ISAP contract.

George Zoley

Well, the population has slightly trended up. It's gone from, I think, 185,000 to approximately 190,000. But importantly, within that mix are the changes, as I've been discussing, in the electronic devices that are used. They've gone to the more costly and more secure ankle monitors rather than phones. And the other part is the case management, which involves our staff being involved on an interactive basis with people in the program to make sure we know who they are, where they are, and that they're going to be attending their meetings on site with our company, as well as the court hearings that will adjudicate their cases.

Gregory Gibas

Got it. Thanks very much. I'll pass it on.

Operator

The next question comes from Brendan McCarthy with Sidoti. Please go ahead.

Brendan Michael McCarthy

Great. Good afternoon. I just wanted to start off on the new Adelanto management contract. I think you mentioned there was a contract modification there that added roughly $60 million in annual revenue. I believe it was due to staffing level increases. Is that baked into the guidance at this point for this year?

Shayn March

Yes, sir. Yep. That is baked in for the rest of this year.

Brendan Michael McCarthy

Got it. Okay. That's helpful. And can you remind us of the contract economics there and maybe talk about the margin profile of that management contract and compare it to the margin profile of how it looked under ownership?

George Zoley

Well, it was an owned facility. It's now a leased facility. Normally, you would expect that there would be a price reduction on the ownership cost issues that are still to be negotiated. They haven't occurred yet. Concurrently, we've had, as the process of renegotiation of that facility, an expanded scope of services that was desired by ICE to add several more staff for several more purposes. And that will offset any decrease in the ownership funding of the facility.

Brendan Michael McCarthy

Understood. I appreciate the detail. Last question. It looks like there's a large implied step-up for capital expenditures for Q4 of this year. Is it safe to assume that's mostly reactivation spending that will be reimbursed by ICE?

Shayn March

Yes, that's correct. It's that plus, obviously, we've pushed some CapEx scheduled for earlier in the year to the fourth quarter. So it's a combination of both, but predominantly going to be tied to activations of the ICE facilities.

Brendan Michael McCarthy

Understood. That's all from me, and congrats on a good quarter.

Operator

This concludes our question-and-answer session. I'd like to turn the conference back over to George Zoley, Chairman, CEO, and Founder of The GEO Group, for any closing remarks.

George Zoley

Okay, thank you, everyone, for joining us today. We look forward to our next call.

Operator

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.

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